Answer the following questions using the information below:
Monster Vehicle Rental Corporation has two departments, Car Rental and Truck Rental. Central costs may be allocated to the two departments in various ways.

-If administrative expense of $62,500 is allocated on the basis of number of employees, the amount allocated to the Truck Rental Department would be:
A)$37,500
B)$62,500
C)$46,875
D)$15,625

Question

Answer the following questions using the information below:
Monster Vehicle Rental Corporation has two departments, Car Rental and Truck Rental. Central costs may be allocated to the two departments in various ways.
 
-If administrative expense of $62,500 is allocated on the basis of number of employees, the amount allocated to the Truck Rental Department would be:
A)$37,500 
B)$62,500 
C)$46,875 
D)$15,625

Quizplus · Accepted Answer

The allocation of administrative expenses is based on the number of employees. If the Truck Rental Department has a proportion of employees that corresponds to $15,625 of the total $62,500 administrative expense, then that is the amount allocated to it.

Answer the Following Questions Using the Information Below